Choose the right account for the job.
Account tax treatment can matter as much as the investments inside it. Rules depend on eligibility and personal circumstances.
401(k)
Check fees, investment choices, vesting, and any employer match. Many plans allow both traditional and Roth contributions.
Traditional deferrals generally reduce current federal taxable income; withdrawals are generally taxed as income. Roth 401(k) contributions are after-tax.
Roth IRA
Often useful when paying tax now is preferable to paying tax on withdrawals later. Contributions can generally be withdrawn under different rules than earnings.
Contributions are made with after-tax money. Qualified withdrawals are generally tax-free. Eligibility and contribution limits apply; income phaseouts may restrict direct contributions.
Traditional IRA
Deductibility and eventual tax treatment depend on your circumstances. A Roth conversion can create a current tax bill.
Contributions may be deductible depending on income and workplace-plan coverage. Withdrawals are generally taxable; early-distribution rules and exceptions apply.
HSA
Nonmedical withdrawals before age 65 generally face income tax and an additional tax. Employer contributions count toward the limit.
For eligible people enrolled in an HSA-qualified high-deductible health plan. Contributions may be deductible or pre-tax, growth is tax-deferred, and qualified medical withdrawals are tax-free.
Taxable brokerage
Flexible access and broad investment choice. Tax-lot selection and turnover can affect tax bills.
No annual contribution ceiling, but dividends, interest, and realized gains can create current taxes. Capital gains rates and holding periods vary.
2026 annual contribution-limit references
General federal limits. Employer contributions, eligibility, age, compensation, income, and filing status can change what applies to you.
| Account limit | Base | Catch-up | Notes & source |
|---|---|---|---|
| 401(k) employee deferrals | $24,500 | $8,000 (50+) · $11,250 (60–63) | Catch-up contributions depend on plan rules; a higher limit can apply for ages 60–63. IRS source ↗ |
| Traditional + Roth IRA combined | $7,500 | $1,100 (50+) | Combined limit across traditional and Roth IRAs; taxable compensation and eligibility rules apply. IRS source ↗ |
| HSA · self-only HDHP | $4,400 | $1,000 (55+) | Employer and employee contributions count toward the annual limit; eligible individuals age 55+ may have an additional catch-up. IRS source ↗ |
| HSA · family HDHP | $8,750 | $1,000 (55+) | Employer and employee contributions count toward the annual limit; eligible individuals age 55+ may have an additional catch-up. IRS source ↗ |
This account comparison is general information, not tax, legal, or investment advice. Verify current rules with the IRS and a qualified professional.